The British chip design company ARM said that the company’s listing on the London Stock Exchange will be postponed until later in 2023.
ARM has delayed plans to go public because the company’s management is concerned that a global economic downturn and a plunge in technology stocks could scare off potential investors.
ARM sent a letter to private shareholders a few days ago saying that an initial public offering (IPO) could value the company at as much as $40 billion but would not take place until late next year. It was widely expected that the company would be listed as early as the first quarter of next year.
British government officials have been lobbying for ARM to list on the London Stock Exchange.
Ian Thornton, head of investor relations at ARM, told investors, “Obviously, we want to do an IPO as soon as possible. It might not happen before the end of the month.” He added, “However, preparations for the company’s IPO are going very well and are in the advanced stages of preparation. We can indeed commit to a listing sometime in 2023.”
Analysts had previously estimated that ARM’s market value could be as high as $40 billion after listing. ARM’s chip designs are used by more than 500 customers, including Apple, Samsung and Google, in products such as iPads, mobile phones, cars and smart TVs.
Shares of big tech companies including Facebook parent Meta, Google parent Alphabet and Amazon have all fallen sharply this year as investors worry that soaring inflation, rising interest rates and economic uncertainty will hurt consumer demand and advertising revenue.
In 2016, SoftBank acquired ARM for a huge $32 billion. The delay of ARM’s listing plan will also put more pressure on SoftBank, which has failed in a series of investments.